Sage weathers storm with 10 per cent profit increase

Investors still not impressed though

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Accounting software group Sage has announced a 10 per cent pre-tax profit increase in its interim results. New licences have fallen thanks to a general slowdown but it has managed to tap existing customers to increase turnover by 13 per cent.

The City was not too impressed however as the results came at the bottom of expectations and the company's share price has dropped more than five per cent this morning to rest at 258.25p.

The company also suffered slightly from recent investment in the US market, which has since slowed down thanks to the state of the economy (it spent £183 million acquiring Interact in March).

Sage remains optimistic though, with Chairman, Michael Jackson saying he thinks the company will knock out some good full-year results.

The interim results were: (last year's)

Turnover up 13 per cent to £229.6 million (£202.5 million)

Pre-tax profit up 10 per cent to £59.2 million (£54.0 million)

Earnings per share up 8 per cent to 3.214p (2.987p)

Dividend for the half year up 10 per cent to 0.143p per share (0.130p)

Operating cash flow £66.6 million (£66.7 million)

Mr Jackson had this to say: "Our businesses have made sound progress during the period. Whilst broadening our product portfolio and attracting more customers, we continue to improve underlying profitability. Our second quarter showed an encouraging improvement in revenue growth which continued into April. Whilst not immune to the US slowdown, we believe we will deliver satisfactory results for the full year." ®